Speaker 1: Welcome to How the Money. I'm Joel and I am Matt,
Speaker 1: and today we're asking the question is the stock market broken?
Speaker 1: Is the stock market broken? It makes me think of
Speaker 1: like if you've always gone to a certain candy machine.
Speaker 1: So our kids when we go to visit uh Kate's folks,
Speaker 1: the in laws, they've got this Eminem's machine and at
Speaker 1: their house, Yeah, like an old timey like gumball machine
Speaker 1: that they've stuck peanut Eminem's in with a little jar
Speaker 1: of quarters or coins to the side of it. And
Speaker 1: it makes me think that if we went to visit
Speaker 1: them and the girls stuck a coin in there to
Speaker 1: get some of those peanut Eminem's and it didn't work,
Speaker 1: they would say, Hey, this thing's broken. This is I'm
Speaker 1: not getting the treats. I'm not getting the candy like
Speaker 1: I used to. And I think that's how a lot
Speaker 1: of folks have been approaching the stock market. They've they
Speaker 1: sort of seen it as this ultra savings account that
Speaker 1: just only goes up in value, where they've only seen
Speaker 1: their balances grow over time. And that's why we're asking
Speaker 1: this question today because I think there might be some
Speaker 1: folks wondering have things changed, Is it going to be
Speaker 1: different this time? And they want to know what they
Speaker 1: should be doing. That's why we're talking about investing and
Speaker 1: talking about the stock market. Recent returns have not not
Speaker 1: been so good if you are largely exposed to the
Speaker 1: stock market, and future predictions aren't so great either. We're
Speaker 1: going to kind of kind of talk about the stock
Speaker 1: market from both of those perspectives today on the show.
Speaker 1: Before we get to that, Matt, I want to mention
Speaker 1: we we got feedback from a listener, Amanda, who is
Speaker 1: participating in the How the Money Tell Your Stuff challenge,
Speaker 1: which by the way, just updates you. I sold three things,
Speaker 1: uh this past weekend? Got after it? That's all right?
Speaker 1: Were you shamed? Turn on the jets. You shouldn't feel shamed. No,
Speaker 1: I wasn't, but it really I it lit a fire
Speaker 1: to me because it was something that I'd put on
Speaker 1: the back burner. Why we talk about this kind of stuff.
Speaker 1: We talk about money because we want you focusing on
Speaker 1: your money. I got challenged talking about the challenge because
Speaker 1: we want you to be made myself more than a
Speaker 1: hundred bucks on those three items, which is great, And
Speaker 1: it just felt good to clear some things out that
Speaker 1: I've been meaning to clear out that I've been meaning
Speaker 1: to sell. And you know what, seeing people like happy
Speaker 1: to buy that electronic gizmo or gadget for pennies on
Speaker 1: the dollar from what you'd buy it brand new makes
Speaker 1: me happy to would was the electronic device we an
Speaker 1: old iPad, like an iPad generation two that had just
Speaker 1: gotten really slow, but some people really want those. Still
Speaker 1: is going to be able to put that thing? We
Speaker 1: had a chromebook that we were using for virtual school.
Speaker 1: Rome Books are not great. They're kind of slow too,
Speaker 1: but it was one of those things where we had
Speaker 1: bought it during you know, on sale or something to
Speaker 1: to help facilitate virtual school during the pandemic, and now
Speaker 1: we're not using it anymore. I got it from the school.
Speaker 1: We stole it from how to Scratch out of this
Speaker 1: code that was exactly at the top. No, we actually
Speaker 1: got it ourselves. Yeah, well, something worth mentioning to. Amanda
Speaker 1: mentioned going to consignments words to sell some of her stuff.
Speaker 1: That was really cool to mention because personally, I don't
Speaker 1: know what consignment stores are like. I mean, I know
Speaker 1: what they are, I just haven't participated in them myself.
Speaker 1: I know that you can leave things there at the store,
Speaker 1: they take a cut when it comes time to sell
Speaker 1: because they've got the storefront all that kind of thing.
Speaker 1: I don't know. In my mind, it's like this old
Speaker 1: school term. It's like, if you go to consignment shops,
Speaker 1: I bet you also buy stuff on layaway, Like it's
Speaker 1: a part of the same sort of generation generational I
Speaker 1: don't know, I think a shift in my mind. I
Speaker 1: think of consignment stores as people who are more modern
Speaker 1: antique enthusiasts or something like vintage people. And sometimes those
Speaker 1: consignment stores are actually perfect for some of those items
Speaker 1: where you're like, I think this is worth something, but
Speaker 1: I don't know how to go about selling it. I
Speaker 1: don't know how to find the right buyer who's going
Speaker 1: to pay the amount that this thing is worth. And
Speaker 1: so Amanda mentioned consignment shops for for some of those things.
Speaker 1: I think she's got a good point. Because let's say
Speaker 1: I've got a mid century antique and I just post
Speaker 1: it on Facebook yard Sale myself, like I did for
Speaker 1: Facebook Marketplace. I guess right, the chances are I am
Speaker 1: not going to get top dollar. But but let's say
Speaker 1: somebody else with a mid century following on Instagram of
Speaker 1: ten thousand people. Uh, they might be able to take
Speaker 1: that same piece and sell it for twice as much
Speaker 1: as I could, because those the buyers that want that
Speaker 1: kind of stuff are specifically looking at this person's page consistently.
Speaker 1: They know they have good stuff. And so that's kind
Speaker 1: of how I think of consignment source. I think it
Speaker 1: can help you find the right buyer if you have
Speaker 1: an item that's of particular specific niche value. That's that's true.
Speaker 1: So I will sell you that bedroom set for a
Speaker 1: little under two thousand dollars and you can take it
Speaker 1: to the consignment shop. Okay maybe maybe No, I'll give
Speaker 1: you eight hundred for it, and then I will go
Speaker 1: take it the consignment I put to you for eight hundred.
Speaker 1: Let honestly, I think I think it might end up
Speaker 1: around like in the eight range personally. Well, there, we'll see.
Speaker 1: That's one of the beautiful things I think about American
Speaker 1: capitalism is people can buy things. We want to talk
Speaker 1: about capital I know we will, we will in the sentise,
Speaker 1: But I have something just that middle middlemen or women
Speaker 1: can profit because of the laziness of other folks or
Speaker 1: you know, and you can have literally I'm lazy to
Speaker 1: business four kids, I too can be lazy and or
Speaker 1: or busy and find I'd rather have someone else maybe
Speaker 1: sell something on my behalf and maybe we both end
Speaker 1: up profiting, which is But all right, enough about that, Matt,
Speaker 1: Let's mention the beer we're having on this episode. This
Speaker 1: one is called Escape from Logger Mountain by Flying Machine Brewing.
Speaker 1: I think is that? What are they are? North Carolina?
Speaker 1: They got the North Carolina logo on there or the
Speaker 1: outline of the state. So that's how you know it's
Speaker 1: legit came from that actual state. Looking forward to enjoying
Speaker 1: us one today, buddy, Yeah, no doubt, me too. But
Speaker 1: let's move on. Let's let's ask the question. Is the
Speaker 1: stock market broken? We've got a lot of ground to
Speaker 1: cover on this on this one, Matt. And really, when
Speaker 1: you look at it, the stock market is the greatest
Speaker 1: wealth creating machine in history. And investing in the market
Speaker 1: to achieve millionaire status, like that's what people want, right,
Speaker 1: You want to become a millionaire, You want a million
Speaker 1: dollars in the retirement accounts. Well, that's become possible for
Speaker 1: such a large amount of folks in this country, in particular,
Speaker 1: thanks to workplace retirement accounts and low cost index funds.
Speaker 1: Fidelity alone one of our favorite brokerage houses. They reported
Speaker 1: that about four hundred and forty two investors have more
Speaker 1: than a million dollars in their four own case as
Speaker 1: of last year. That's just Fidelity customers. So we we
Speaker 1: potentially have millions of people who are millionaires in this
Speaker 1: country and it's easier to do than than ever before now.
Speaker 1: And it makes me think, Matt of maybe, like some
Speaker 1: of our earliest episodes of how the Money that we
Speaker 1: like to pretend never happened because they weren't that great.
Speaker 1: I kind of refused to go back and listen because
Speaker 1: I don't know that I could bear the weight of
Speaker 1: our in aptitude in those early as episodes. Not in aptitude,
Speaker 1: just lack of total awesomeness. You can say that we've
Speaker 1: gotten better. We've done a lot. In five D episodes,
Speaker 1: they were functional, yea, Like I pictured almost like a
Speaker 1: craftsman who's like a drywaller, somebody who knows how to
Speaker 1: do drywall, Like is that drywall up on the wall,
Speaker 1: does it hold? Does it create a wall? Yes, it's
Speaker 1: all of those things, but there's sort of an artistry
Speaker 1: to it, and that's what you develop over time. You
Speaker 1: can tell bad drywall, you see the seams, you see
Speaker 1: the tape protruding. Maybe I'm getting a little too poetic
Speaker 1: when I show to the podcast. We just sit out
Speaker 1: and talk. But we have gotten better at sitting down
Speaker 1: and talking. And just just because of the path hasn't
Speaker 1: always been smooth, I means some episodes have been better
Speaker 1: than others, and along the way, most of our episodes
Speaker 1: hopefully have generally gotten just a little bit easier for
Speaker 1: people to listen to. Well, that doesn't mean that the
Speaker 1: whole ride hasn't been worthwhile. And then those first episodes
Speaker 1: weren't necessary in part of the growth process. And right
Speaker 1: now it just kind of makes me think like, well,
Speaker 1: we're experiencing some market turbulence, and future predictions of what
Speaker 1: the stock market is going to do incoming years aren't
Speaker 1: looking so hot either, And so I don't know, should
Speaker 1: you not take a flight maybe because there's gonna be turbulence.
Speaker 1: Should you not go see your grandma because on the
Speaker 1: way there might be some bumpy bumpy ride in the air. No,
Speaker 1: of course you're still going to take the airplane ride
Speaker 1: in order to cut twenty hours off your trip if
Speaker 1: flying across the country. And so today on the show,
Speaker 1: we're gonna kind of talk about how we think you
Speaker 1: should be thinking about the current shopping market and then
Speaker 1: how that should also influence your your behavior. It's right, Yeah,
Speaker 1: you're saying that the general trajectory of the stock market
Speaker 1: has been up into the right, that's what we're talking
Speaker 1: about today, but more recently, like what you're specifically talking
Speaker 1: about here is volatility, because the stock market has been
Speaker 1: in the dumps. You know, this has been a terrible
Speaker 1: start to investing so far. Ino And like we often
Speaker 1: see during these bouts of volatility, a lot of investors
Speaker 1: they start wondering if if things are gonna be different
Speaker 1: this time. Right, it's been a it's been a good
Speaker 1: hundred years. It's been a good run. But it's all
Speaker 1: over now. And it's not just a chicken little mindset
Speaker 1: that's that's running amuck in your friend group. There are
Speaker 1: a ton of different financial forecasts out there that are
Speaker 1: being made about the fact that we're in for a
Speaker 1: lower performance year and and even less sellar returns for
Speaker 1: years to come. And it's not even just the talking
Speaker 1: heads like on CNBC sutting this nonsense. We can dismiss
Speaker 1: them pretty easily when the imney be exactly the different
Speaker 1: investing TV shows out there, respect the companies like Fidelity,
Speaker 1: like you just mentioned, like Vanguard, other large banks, they're
Speaker 1: predicting average tenure future returns in the three to four
Speaker 1: percent range, and those predictions could be significantly off in honestly,
Speaker 1: in either direction. Of course, these are just educated guesses,
Speaker 1: but given the last decade of incredible returns, they might
Speaker 1: not be too far off. But even still, what do
Speaker 1: we do with this information today? You know, should predictions
Speaker 1: of these appar future returns affect how we should invest today?
Speaker 1: That's what we're discussing today on the podcast. Yeah, so
Speaker 1: you you hinted at the fact that the last ten, ten,
Speaker 1: twelve years, Matt have been just incredible when it comes
Speaker 1: to stock market returns. And so let's talk about that
Speaker 1: bowl run for a second, because a lot of how
Speaker 1: the money listeners, they've really only experienced what it looks
Speaker 1: like to invest in the middle of a bowl run,
Speaker 1: not counting maybe like the blip we saw in when
Speaker 1: we thought it was the end of the world, but
Speaker 1: that recovery, that stock market covery. Recovery in the the
Speaker 1: teeth of the beginning of COVID was just incredibly rapid,
Speaker 1: so most of us barely experienced it, and that we're
Speaker 1: worried about other things too. At that exactly that that
Speaker 1: was a not is the stock market broken, but it's
Speaker 1: humanity broken. Yes, again, at that point there was bigger things,
Speaker 1: and once we got that under control, it's like, oh, okay, no,
Speaker 1: things are gonna be fine. But right now all the
Speaker 1: focus is more on the market because there's less societally
Speaker 1: to focus on. And when you when you look at
Speaker 1: these returns historically, like with returns over the past couple
Speaker 1: of years and almost average annual return since the Great Recession,
Speaker 1: some folks in their in their twenties and early thirties,
Speaker 1: they might have been starting to think that the stock
Speaker 1: market literally only ever goes up. Right now, you only
Speaker 1: get those peanut eminem's anytime you want, think wait on demand.
Speaker 1: Our recession is the thing in the past. Uh, And no,
Speaker 1: the answers is that's not the case. And so yeah,
Speaker 1: some folks started to think that cash was trash and
Speaker 1: that saving money was stupid. Investing, of course, is where
Speaker 1: it's at, and so yeah, but we we you and
Speaker 1: I we like investing. We're not hating on investing. We
Speaker 1: think it's necessary when it comes to building wealth, but
Speaker 1: not to the detriment of other prudent personal finance decisions.
Speaker 1: And so folks now are starting to realize maybe some
Speaker 1: of the importance of emergency funds or savings, liquid cash.
Speaker 1: Those are important things, even though it can feel like
Speaker 1: a dumb decision, especially in the short term when other
Speaker 1: people are finding ways to make money what looks like
Speaker 1: hand over fist and you're sitting there with that e
Speaker 1: fund intact and you're like, why am I not investing this? Well,
Speaker 1: I think now we're experiencing the reason why people should
Speaker 1: not be investing that emergency fund. There's a cushion that's
Speaker 1: necessary for folks to have. Yeah, I mean, this is
Speaker 1: why we came up with the seven money gears, because
Speaker 1: there's a formulate process that we want folks to go through,
Speaker 1: and it's not just about getting that cushion, but there
Speaker 1: are other important things to do as well. We definitely
Speaker 1: want folks to take that balanced approach. But yeah, you know,
Speaker 1: those outside gains that you're talking about, they were not
Speaker 1: going to last forever. Especially with the low interest rates
Speaker 1: we saw with the FED intervention like that all helped
Speaker 1: to speed some of the growth that we've scene, And
Speaker 1: so it's important to zoom out and to take a
Speaker 1: broader look at what the stock market typically returns because if, yeah,
Speaker 1: if you only paid attention to the past twelve or
Speaker 1: thirteen years, it can be easy to flee yourself into
Speaker 1: thinking that these outside returns are the new normal. So
Speaker 1: lately I've been running a good bit more. I'm trying
Speaker 1: to train for the Peachtree Road Race. That's Atlanta's premier
Speaker 1: tin k available to anybody who signs up for the
Speaker 1: most part. But like, it makes me think of track
Speaker 1: your closest friends. It's so many people. But okay, imagine
Speaker 1: if you you're training or like during a race, Uh,
Speaker 1: you're watching your time, You're you know, you're you're tracking
Speaker 1: your pace. You get to a portion of the race
Speaker 1: where there's maybe a long sort of easy downhill, you
Speaker 1: would see your pace just go off the charts, like
Speaker 1: you would see your your average pace just declined significantly. Uh,
Speaker 1: and it's gonna look like you're gonna be able to
Speaker 1: maybe set a personal record, maybe even a pr for
Speaker 1: your age group, who knows, But it would be foolish
Speaker 1: to just assume that you would be able to maintain
Speaker 1: that ace uh once you started to gain elevation again,
Speaker 1: which gets a heart attack hill, right, isn't that what
Speaker 1: they call it? Uh? Cardiac cardiac cardiac kill whatever it's like,
Speaker 1: rather next to the hospital. But the same is true
Speaker 1: with the market as well. You know, we've had some
Speaker 1: incredible bursts we've had we've had some periods of some
Speaker 1: stretches where it just, I mean, the returns were off
Speaker 1: the charts. And while we do believe that the market
Speaker 1: will continue to go up over time, you know it
Speaker 1: always does, that doesn't mean that the pace of that
Speaker 1: growth will stay the same. Yeah. No, I think that's
Speaker 1: a really good way of putting it, Matt, Because in
Speaker 1: that race, yeah, you're feeling good about your pace, but
Speaker 1: then you hit the tougher sections and you are inevitably
Speaker 1: going to slow down. So humans just can't run up
Speaker 1: hill as fast as they can run down. There's some
Speaker 1: folks who disagree with you, but really, oh yeah, there's
Speaker 1: there's people who who like to book it up hills.
Speaker 1: It's tough going fast down hills because I think personally,
Speaker 1: I think I'm more prone to injury because you're going
Speaker 1: a little bit fast, a little out of control. Yeah,
Speaker 1: that's gonna be the best acceleration. It's hard on the
Speaker 1: knees to write that's true. Well, it actually that reminds me,
Speaker 1: Matt of a piece that Barry red Holtz wrote recently.
Speaker 1: He's a financial writer and and he was discussing the
Speaker 1: fundamental reason that the market has been having a rough
Speaker 1: go of it lately, and he he uh talked about
Speaker 1: Occam's razor, which which basically means that the simplest explanation
Speaker 1: is almost always the correct one. And he was saying
Speaker 1: that that means that, well, the simplest explanation is just
Speaker 1: what's called mean reversion. That's at the heart of recent declines.
Speaker 1: It's the fact that we have experienced these outside gains
Speaker 1: and of course now we're paying the price as the
Speaker 1: stock market is retreating. And it's kind of it made
Speaker 1: me think of like a baseball player who starts off
Speaker 1: the season first month of the year hit more. Sports
Speaker 1: were hitting everybody with all the different illustrations we can
Speaker 1: think of, So baseball player hitting three seventy five, but
Speaker 1: typically they're hitting to fifty, Right, that's their normal average.
Speaker 1: That's pretty average, I would say, Actually, I don't know.
Speaker 1: In modern baseball though, more strikeouts the worst batting averages. Lately,
Speaker 1: it's really tough for sport to watch these days. Yeah,
Speaker 1: but but what if it's that your first time that
Speaker 1: bat and you get to hit your bat in a
Speaker 1: thousand That's right, that's true. Yeah, but what's what's the
Speaker 1: likelihood that's gonna last all season? Uh? Not likely unless
Speaker 1: get like some sort of season ending injury right after
Speaker 1: that hit, I guess. But yeah, it's a nice start
Speaker 1: of the season to be hitting close to four hundred.
Speaker 1: But in reality, you're going to experience mean reversion, especially
Speaker 1: in those dog days of summer. Even if you have
Speaker 1: a killer month in May, let's say July and August
Speaker 1: are gonna come around and your batting average is gonna
Speaker 1: start to dip. Start feeling that summer heat, let's start
Speaker 1: sweating a little bit more than you were down there
Speaker 1: in spring training. Plus, yeah, then you're an othern Colorado
Speaker 1: where it's nice and cool games into the season and
Speaker 1: you're probably starting to have some fatigue. There's just no
Speaker 1: way to continue it for a whole season. And and so, Yeah,
Speaker 1: that things are coming back down to earth, and the
Speaker 1: same thing is happening with the market. Right, those exorbitant
Speaker 1: returns that we've seen over the past you know, decade,
Speaker 1: they're not the new forever reality. Although I think some
Speaker 1: people were starting to think that it was. They were
Speaker 1: at least treating their money as though the stock market
Speaker 1: was this eminem candy machine that was going to continue
Speaker 1: to produce until we reached the moon status I guess,
Speaker 1: or whatever that was gonna be. I don't know. Yeah,
Speaker 1: and hopefully we're not bumming you out with this more
Speaker 1: somber conversation. But even though we are injecting you with
Speaker 1: a dose of realism, we still have plenty of reasons
Speaker 1: to believe that you should be investing in the stock market. Uh.
Speaker 1: And we're actually gonna talk some specifically about what you
Speaker 1: should be doing with this new information, the fact that
Speaker 1: not only have we entered some periods of volatility, about
Speaker 1: that there is some talk about the fact that the
Speaker 1: market may not be what it used to. We'll get
Speaker 1: to all of that right after this break. Aren't that
Speaker 1: we're back. We're still talking about the stock market. Is
Speaker 1: it broken or is this just uh, the reality of
Speaker 1: how the stock market works. We'll talk about maybe the
Speaker 1: fundamentals of how the stock market works here in a
Speaker 1: little bit, and we'll also talk about whether or not
Speaker 1: folks should be making changes to their portfolio kind of
Speaker 1: based on what's happening right now and based on some
Speaker 1: of the predictions, like you talked about those those Fidelity
Speaker 1: in Vanguard predictions where it's like growth gonna slow a
Speaker 1: good bit and and your portfolio isn't going to you're
Speaker 1: not going to see the games that you've been seeing,
Speaker 1: So then how do you approach that likely near term future.
Speaker 1: We'll discuss that in just a second. But I wanted
Speaker 1: to talk about optimism for a second, because you know,
Speaker 1: I think stock market optimism is a good thing for
Speaker 1: all of us to have, and I myself am pretty
Speaker 1: optimistic and just as an individual. But you know, I
Speaker 1: think it's also possible to take optimism to the extreme. Right.
Speaker 1: You can you can be so optimistic that you're not
Speaker 1: actually looking at facts on the ground, you're not living
Speaker 1: in reality. And so there's a difference between a healthy
Speaker 1: dose of optimism and being optimistic to a point where
Speaker 1: you're living in some sort of Mary Poppins Fantasy Mary
Speaker 1: Poppins returns the original, the original probably the new one's
Speaker 1: really good and it's good. It's good. The girls can't
Speaker 1: get enough of that. Abbie has been humming what is
Speaker 1: the Something music Hall? Yeah, I've only seen it once,
Speaker 1: so it's been will not stop humming? There. They got
Speaker 1: distracted when you said, Mary Popps, No, it's all good.
Speaker 1: But it's adorable when they start dancing with penguins and
Speaker 1: stuff like that. But but really they're you know, they're
Speaker 1: they're not in the real world at that point. They're
Speaker 1: not in reality. That's what we're talking about. And and
Speaker 1: this is what I think has happened to a lot
Speaker 1: of investors in the past couple of years, maybe even
Speaker 1: some how the money listeners. It's, you know, taking what
Speaker 1: is otherwise one of the greatest ways to build wealth,
Speaker 1: and and folks have attempted to make money in ways
Speaker 1: that don't make much sense. Right. That's given rise to
Speaker 1: n f t s, random crypto coins, and it is
Speaker 1: reflective of this frothy environment where sanity largely left the building. There.
Speaker 1: There's a difference i'd say between that reality based optimism
Speaker 1: that reflects what we're saying are historical realities, and then
Speaker 1: this overly rosy outlook that has I would say, has
Speaker 1: an element of greed at the heart of it, where
Speaker 1: people they're not content with average and what folks want
Speaker 1: is to make money at a pace that is otherworldly.
Speaker 1: But like our old pal Warren Buffett says, it's time
Speaker 1: to get fearful when others are greedy. And we have
Speaker 1: seen greedy behavior recently, and I think we're kind of
Speaker 1: on the other side of the hill from some of
Speaker 1: that greedy behavior. We're seeing maybe some of the demise
Speaker 1: of some of those more greedy behaviors. Yeah, you know,
Speaker 1: think it's worth pointing out too. I think one of
Speaker 1: the reasons we saw some of that greedy behavior, uh
Speaker 1: is because like think about the amount of money that
Speaker 1: was injected into our you know, speaking, I keep saying injections.
Speaker 1: We're talking about injecting realism, talking about injecting stimulus funds.
Speaker 1: But like we without having a left a finger, got
Speaker 1: so much money that we weren't necessarily counting on hug
Speaker 1: decentative Americans. Yes, it showed up in our bank and
Speaker 1: they couldn't spend exactly, and so what do you do
Speaker 1: with that I think you tend to make more speculative moves,
Speaker 1: like you tend to gamble that money with the chance
Speaker 1: that it might go up, especially as you've you've heard
Speaker 1: people talk about crypto for a while, Oh what are
Speaker 1: these new n f T s, And you start taking
Speaker 1: that money, you start putting it in there, and the
Speaker 1: two people getting rich quickly, and you're like, I better
Speaker 1: jump in on that exactly. But like that certainly has
Speaker 1: been something that has changed. And when others out there
Speaker 1: were a little more greedy, hopefully we should have been
Speaker 1: a little more fearful. But like you said, we're we're
Speaker 1: kind of seeing the tide shifts. We're starting to see
Speaker 1: it go out that optimism has quickly shifted to pessimism.
Speaker 1: It's it seems like, speaking of CNBC that they released
Speaker 1: a survey last month and it showed that only twenty
Speaker 1: eight or sent of investors think that it's currently a
Speaker 1: good time to be in stocks right now. People are
Speaker 1: just less enthusiastic about stocks because they aren't doing so
Speaker 1: hot right now. Uh. And the thing is, though the
Speaker 1: market it doesn't care about how you're feeling. For instance,
Speaker 1: the ridiculously short COVID blip like you mentioned, So like
Speaker 1: that's what that taught us, I think, because our our
Speaker 1: collective society was at that point in time reeling from
Speaker 1: pandemic fallout, uncertainty. Yeah, yeah, yeah, there's a lot that
Speaker 1: we didn't know. But simultaneously the market was climbing rapidly. Uh.
Speaker 1: And so the current pessimistic mood, it often means that
Speaker 1: long term investors like ourselves, I think, should become even
Speaker 1: more optimistic, taking advantage of stock declines so that our
Speaker 1: investment dollars go even further. Because the flip side of
Speaker 1: that war Buffet quote I gave Matt, he says to
Speaker 1: get fearful when others are greedy. Well, we'll be greedy
Speaker 1: when others are fearful. And so now that the tide
Speaker 1: is shifting, stocks are down, who is out there buying
Speaker 1: more stocks? It's warm, Buffet is and I think it's
Speaker 1: a sign that we should be too. When more people
Speaker 1: are pessimistic rather than optimistic, and the consumer sentiment has
Speaker 1: essentially shifted in terms of how they view the stock market,
Speaker 1: it's time for us to maybe take the opposite approach,
Speaker 1: putting more of our money to work. And it's also
Speaker 1: important to point out that the economy is not the
Speaker 1: stock market. There's a lot of talk about the risk
Speaker 1: of the Fed, you know, tipping the economy into a
Speaker 1: recession due to the need to raise interest rates because
Speaker 1: of inflation. Inflation is obviously running hot and the FED
Speaker 1: is trying to get that under control. We talked about
Speaker 1: this actually in episode five oh three when we were
Speaker 1: talking about preparing for a looming recession. Looming recession. That's right,
Speaker 1: that's right if you recall and a recession is defined
Speaker 1: as two consecutive quarters of GDP decline. But the fact
Speaker 1: is that the stock market, it doesn't necessarily decline during
Speaker 1: a recession. If you look at the past seventy years,
Speaker 1: the average return during a recession was negative one And
Speaker 1: you might say, ah, so the market does go down
Speaker 1: full is You're wrong, But it's interesting in reality, the
Speaker 1: returns are even worse in the lead up to a recession.
Speaker 1: So on average, the stock market returned negative two percent
Speaker 1: six months prior to a recession and negative three a
Speaker 1: year twelve months prior to a recession. And so yeah,
Speaker 1: if you want to guess stock market returns after the
Speaker 1: recession begins seven to between six and twelve months are
Speaker 1: the return so in the in the extreme positive range
Speaker 1: after the startup recession. It's it's amazing how the market
Speaker 1: is almost like forecasting the where the economy is going
Speaker 1: to eventually end up. They're not always going in lockstep together,
Speaker 1: which only reinforces the fact that it's difficult, incredibly difficult
Speaker 1: to time the market and to figure out when is
Speaker 1: the actual bottom as the market is looking ahead. But
Speaker 1: this only reinforces that warm buffet quote right, often when
Speaker 1: things look bad, that is the best time to invest,
Speaker 1: which obviously, again it seems counterintuitive, and we mentioned that
Speaker 1: the historical reality of the stock market just a second ago,
Speaker 1: So let's talk about that. For the earnings of publicly
Speaker 1: traded companies as a whole continue to go up over time,
Speaker 1: not every company progresses at the same pace um, and
Speaker 1: some companies are are actually declining while others are booming.
Speaker 1: But overall, if you own a diversified basket of companies,
Speaker 1: say for instance, in a Total Stock Market Index fund
Speaker 1: or the smp F I funder, you're going to see
Speaker 1: your money grow over time. Because the average return of
Speaker 1: the market since has been nine eight percent a year.
Speaker 1: And so this this beautifully creative and simultaneously destructive machine
Speaker 1: of capitalism. It just continues. It's march again upboards and onwards,
Speaker 1: even when world events are scary and when consumer confidence
Speaker 1: is low, which it is right now. Yeah, Matt, what
Speaker 1: what you're talking about here? These returns, these historic returns,
Speaker 1: are based on the underlying reality that of capitalism. And
Speaker 1: it's as these companies, these individual companies are participating in
Speaker 1: this overall system that we have. They are benefiting all
Speaker 1: of us as they create new items, as new technology
Speaker 1: comes out, drives prices down and it drives innovation up.
Speaker 1: And in episode four seventy nine, we discussed why we
Speaker 1: feel like capitalism is ultimately a force for good. And
Speaker 1: if you'd access the question is it is it only
Speaker 1: a good thing? We would say no, free markets that
Speaker 1: they don't fix everything. There are other problems in our
Speaker 1: society that need to be remedied other ways. But ultimately
Speaker 1: it's the best economic system that we've got and it's
Speaker 1: increased living standards and it's brought more folks out of
Speaker 1: poverty than anything else humans have tried. And so, yeah,
Speaker 1: businesses that we invest in, they're working to create value
Speaker 1: in our society. And if they find a customer base
Speaker 1: and they succeed. Profit is the end results, and as
Speaker 1: investors in the stock market, we get to participate in
Speaker 1: some of those profits, which I think is the coolest
Speaker 1: thing ever. It kind of almost doesn't seem fair Matt,
Speaker 1: that we can kick back and passively invest. It almost
Speaker 1: doesn't use almost none of our brain energy, just use
Speaker 1: our dollars and still see something. I get ten percent
Speaker 1: return over the past hundred years. But really, for the
Speaker 1: average index investor, for the lazy, boring investor route like
Speaker 1: we are, like we want people to take, it's quite
Speaker 1: simple and history points to the fact that it's it's
Speaker 1: quite effective in helping us build wealth. Yeah, it's really
Speaker 1: interesting too, is to consider how the market, how it
Speaker 1: self regulates, right, because if you take that, imagine the
Speaker 1: situation like a worst case scenario where you've got everybody
Speaker 1: has become a passive investor and nobody is innovating. Well,
Speaker 1: what's going to happen to the stock market returns? You
Speaker 1: could argue you could foresee a world where you could
Speaker 1: see those returns decline, right, because if fewer people are
Speaker 1: out there taking risks, because everybody wants to play it
Speaker 1: safe and invest in the entire stock market. There is
Speaker 1: technically less value being brought into the world, which means
Speaker 1: lower returns, but it's self regulating in this way because
Speaker 1: there are going to be individuals who say, well, I
Speaker 1: want to see a higher return, and so they are
Speaker 1: then willing to risk their dollars in ways that ultimately
Speaker 1: need to provide more value and more benefits to the
Speaker 1: world in order for them to receive the benefit from
Speaker 1: that direct investment. And of course people who invest within
Speaker 1: that company, you know, within those individuals as well, we'll
Speaker 1: see these higher returns I mentioned because you could foresee
Speaker 1: a world where it's just like, well, if everybody becomes
Speaker 1: passive total stock market investors, well maybe we are going
Speaker 1: to see declines in the market. But ultimately I almost
Speaker 1: see it as like this automatic leveling system that's just
Speaker 1: inherently built into the market. But there will always be
Speaker 1: people who think that they're smarter and who want bigger,
Speaker 1: better returns, or just want to do something different, you know,
Speaker 1: like like there will be individuals who want that autonomy
Speaker 1: and don't want to sit back because they've got something
Speaker 1: to create. They have something that they want to introduce
Speaker 1: into the world. They want to make their mark, and
Speaker 1: so I think there will always be opportunity for us
Speaker 1: kick back style passive investors because of those other folks
Speaker 1: on on the other side of the spectrum. Exactly. It's
Speaker 1: it's super cool when you think about it that way,
Speaker 1: but there will be carnage along the way of the
Speaker 1: stock market growth. You don't get the reward without the risk.
Speaker 1: You're not going to see that average tim percent return
Speaker 1: without some subpar years. Uh, it comes with the territory.
Speaker 1: But overall, the economy will continue to grow and corporations
Speaker 1: that you can invest in will continue to earn more money.
Speaker 1: And again, some companies they're gonna stick around for decades,
Speaker 1: creating loads of profit for investor is, but others won't
Speaker 1: stick around for for long or do anything terribly noteworthy.
Speaker 1: And that is one of the coolest aspects of capitalism
Speaker 1: is that it automatically self cleanses. The market decides what
Speaker 1: companies are going to stick around and which one's get
Speaker 1: the boot. But again, the general trajectory is up into
Speaker 1: the right. It's it's healthy to remind ourselves that the
Speaker 1: entire value of the U stock market, the entire market,
Speaker 1: was one point to trillion dollars back in Apple alone
Speaker 1: is worth significantly more than that. Right now, I think
Speaker 1: it's double that. And so we've got enough historical data
Speaker 1: in our corner to point to the reality that despite
Speaker 1: these immediate market setbacks that we're experiencing, progress will continue
Speaker 1: and we can all benefit from that progress. This is
Speaker 1: why we're optimistic. It's not because we have some sort
Speaker 1: of pie in the sky reason to think that things
Speaker 1: will always get better. We can look back at history.
Speaker 1: History informs the future. It is not guaranteed, but we
Speaker 1: can be encouraged by that fact. Yeah, it's not some
Speaker 1: sort of Pollyanna, no hoping and wishing, or it's not
Speaker 1: like in Ostrich putting our head in the sand, just
Speaker 1: kind of against all odds, wanting something to be the case.
Speaker 1: It is truly the historical reality. We have precedent really
Speaker 1: that we can look to telling us what the stock
Speaker 1: market is likely to do in the years ahead, and
Speaker 1: despite massive shifts to the way our country functions, will
Speaker 1: continue to be the greatest wealth building machine moving forward.
Speaker 1: But if you want it to be that in your life,
Speaker 1: if if you want to be able to use the
Speaker 1: stock market to your advantage, well there are some things
Speaker 1: you're gonna need to realize and and one of those
Speaker 1: things might be making some changes to the way that
Speaker 1: you're investing. And so we'll talk about whether the current
Speaker 1: market reality and you know, future lower return predictions should
Speaker 1: actually cause you to do anything different with your portfolio.
Speaker 1: In the here and now. We'll get to some of
Speaker 1: our thoughts on that right after this. Alright, we're back
Speaker 1: to the break talking about investing in the market. And
Speaker 1: I still have that song stuck in my head. Uh
Speaker 1: do you'm are you? I'm not a fan of that. Yeah,
Speaker 1: I guess we just haven't I don't know, watched it again. Then, well,
Speaker 1: maybe we should only cranks out the hits. If you
Speaker 1: can invest in a person, invest in him, I think.
Speaker 1: I think you're right, him and Tom Brady. Maybe maybe
Speaker 1: they're both at the top of their game and there's
Speaker 1: only you can only go down from here. I think so.
Speaker 1: I mean, lin Manuel is one of those prolific individuals
Speaker 1: who everything he creates seems to turn to gold. It's
Speaker 1: got that Midas touch. Hamilton's obviously, in conto another one.
Speaker 1: I mean, just really, if you get him involved in
Speaker 1: a project, it's gonna be great. Okay. I feel like
Speaker 1: we're going off track again, but we're talking about investing,
Speaker 1: and we've talked through some of these some of these
Speaker 1: trends that we're seeing here in the near term. We're
Speaker 1: talking about the overall larger trend of the stock market,
Speaker 1: which you should expect. But there are a few things
Speaker 1: that you can do differently with the information that we've
Speaker 1: talked about so far, and with the predictions that we
Speaker 1: we truly may not see the kind of returns that
Speaker 1: we've seen over the past twelve thirteen years. There are
Speaker 1: a few things that you can do differently with this information,
Speaker 1: the fact that returns may not be what they once
Speaker 1: we're and so for starters, one of these things that
Speaker 1: you can do is start salking away more money. If
Speaker 1: returns are likely to be lower, you might need to
Speaker 1: invest more of your paycheck in order to reach some
Speaker 1: of your financial goals. If that's something that is financially
Speaker 1: possible for you, ramping out the percentage that you are
Speaker 1: stalking away is a solid move. We're not necessarily talking
Speaker 1: about taking extreme measures extreme steps here, but just to
Speaker 1: keep doing what you what you've been doing, but maybe
Speaker 1: just ratching it up a little bit. You might want
Speaker 1: to increase that amount that you are investing, put your
Speaker 1: foot on the pedal just a little bit harder, and
Speaker 1: add a couple extra percentage points maybe to what you're
Speaker 1: putting into your four one K. Investing more in light
Speaker 1: of potentially inferior returns moving forward is one great way
Speaker 1: to kind of counterbalance things and to make sure that
Speaker 1: you're gonna hit those financial goals that you've got for yourself.
Speaker 1: And hear what we're saying here, This is just a
Speaker 1: slight change to the behavior that you're already doing. You're
Speaker 1: already going in the right direction. Just maybe just juice
Speaker 1: it just a little bit more. We're not telling you
Speaker 1: to pull the e break, you know. We're not telling
Speaker 1: you just throw it in reverse and totally wreck your vehicle.
Speaker 1: We're not telling you to start serving or we're not
Speaker 1: telling you that at the last second exit off the highway,
Speaker 1: cutting a bunch of people off and potentially reckon yourself.
Speaker 1: That is not what we want you to do your portfolio.
Speaker 1: And we don't even need you to like pedal to
Speaker 1: the metal right like you can. You don't have to
Speaker 1: go from saving eight percent of your paycheck to saving
Speaker 1: right that's just not necessary. But in light of those
Speaker 1: future inferior returns, then stacking more money away does make
Speaker 1: more sense. And another another course of action that you
Speaker 1: could take is to take more risks with your investments. Right,
Speaker 1: this is something that that needs to be discussed mat
Speaker 1: but really it's best done on a case by case scenario.
Speaker 1: It's hard for us to tell everyone that they should
Speaker 1: be adding more risk to their portfolio because we've got
Speaker 1: listeners of all ages and stages, people who are in
Speaker 1: the wealth building phase of their life to people who
Speaker 1: are in the wealth preservation stage of their life, and
Speaker 1: and there's a different tact that needs to be taken
Speaker 1: for each of those individuals depending on where they are.
Speaker 1: And I think for some people accepting more risks it
Speaker 1: makes sense if there if they are still in the
Speaker 1: wealth building phase of life, and you know, the short
Speaker 1: term bouts of turbulence aren't going to significantly impact them,
Speaker 1: and so it's actually gonna help boost their returns if
Speaker 1: their dollar cost averaging by investing in a slightly more
Speaker 1: risky way. And what I mean by that is mostly
Speaker 1: that if you're if you have an insufficient allocation of
Speaker 1: your investment portfolio towards stocks, so ramping that up and
Speaker 1: having more exposure to the stock market in the future
Speaker 1: could and should over the years, actually help boost your returns.
Speaker 1: But but then for others, taking on more risk could
Speaker 1: impact their ability to retire, Matt, It can have a
Speaker 1: significantly negative impact if you have too much stock market
Speaker 1: exposure and you need those funds in the new term,
Speaker 1: if you have to start drawing on those funds because
Speaker 1: you're quitting work. So for instance, like my parents, they're
Speaker 1: supposed to be quitting work altogether in the next within
Speaker 1: the next nine months, and there's no way I would
Speaker 1: tell them that they should have more stock market exposure
Speaker 1: at this point in in their life. And so, yeah,
Speaker 1: you have to kind of take your own specific situation
Speaker 1: into account. More risk is helpful for some but harmful
Speaker 1: for others. Yeah, that is a healthy way to expose
Speaker 1: yourself to more risk, because if you're if you're in
Speaker 1: your twenties, you don't need to be in a sixty
Speaker 1: forty portfolio where where you've got bonds, Uh, you should
Speaker 1: probably be in stocks. I'm nearly forty and I in stocks.
Speaker 1: But that can be a healthy approach to adding more
Speaker 1: risk to your portfolio. But you can also you could
Speaker 1: veer off the highway and take this, you know, into
Speaker 1: into the danger zone. Some folks in search of high
Speaker 1: returns have opted for even riskier asset classes like crypto,
Speaker 1: which is still a highly unproven and very speculative place
Speaker 1: to put your money. Some folks have seen their wealth
Speaker 1: cut in half or or even more with no real
Speaker 1: historical assurance that there is going to be a significant
Speaker 1: bounce back by any means. Uh. And you know, can
Speaker 1: you gotta ask yourself, can you stomach that sort of
Speaker 1: draw down? Because knowing your specific timeline, knowing your talents
Speaker 1: for risk is this is all going to be crucial
Speaker 1: information before we start amping up your risk level. And
Speaker 1: for a lot of folks, the best course of action
Speaker 1: is to keep doing whatever it is that you're doing
Speaker 1: right now, even in the midst of subpar market predictions.
Speaker 1: We would not recommend for you to gamble in order
Speaker 1: to increase your return. Just stay the course. Yeah, Matt,
Speaker 1: there is a certain window in which taking on more
Speaker 1: risk might make sense for people. But then there is
Speaker 1: the ability you can turn the risk style up to
Speaker 1: like nine thousand, and that is what putting let's say
Speaker 1: everything in toward into different crypto coins would be and
Speaker 1: and some folks have taken that approach and it has
Speaker 1: hit him right where it hurts lately, because, yeah, the
Speaker 1: crypto market has been not so great. And no matter
Speaker 1: what Matt, there are a few things that people should
Speaker 1: always pay attention to, whether we're experiencing a bowl or
Speaker 1: a bear market. And if you pay attention to these
Speaker 1: few things in particular, I think people are are likely
Speaker 1: to have a good wealth building experience over the years.
Speaker 1: And it doesn't mean they won't be immune from downturns
Speaker 1: or portfolio losses, but it will mean they'll be able
Speaker 1: to stay the course and they'll be able to experience
Speaker 1: the wealth generating abilities of the overall style market over
Speaker 1: the years over the decades. And so let's talk about
Speaker 1: a few of those things. One is choosing the right
Speaker 1: funds to invest in and specifically opting for diversification, because
Speaker 1: I will say having a diversified portfolio has felt pretty
Speaker 1: boring over the past few years. In particular, Uh, there
Speaker 1: have been a lot of people chatting about Cathy Wood
Speaker 1: and her ARC fund a r k K, which is
Speaker 1: the innovation fund killed it during the pandemic. Yeah, I
Speaker 1: mean like to see some of the returns. She was
Speaker 1: experiencing the exploding growth of some of the companies that
Speaker 1: she was betting on. It drew a lot of eyeballs,
Speaker 1: that drew a lot of media attention, and it drew
Speaker 1: a lot of investor dollars. People were excited, they wanted
Speaker 1: to participate, they wanted to be a part of the
Speaker 1: next big investment fund. And so yeah, it's it's drawn
Speaker 1: actually some similar interest as the fund has been plumbing
Speaker 1: recently too. And it can just be tough though for
Speaker 1: people to watch while other people out there in the
Speaker 1: investing space are making a killing when you're just humming
Speaker 1: along getting basic average SMP level returns. And so yeah, diversification, though,
Speaker 1: it can be boring on the way up, but it's
Speaker 1: a lifesaver on the way down, because when you look
Speaker 1: at what's happened with that Arc Innovation Fund just in
Speaker 1: the last six months, and when you look at what's
Speaker 1: happening to the overall stock market, you know what, it's
Speaker 1: a whole lot easier to stomach what's been happening in
Speaker 1: the overall stock market than it is in just a
Speaker 1: handful of those high flying stocks. Anybody who decided to
Speaker 1: invest most of their retirement in that arc fund is
Speaker 1: understandably freaking out right now because the roller coaster ride
Speaker 1: they've been on and right now they are not sitting
Speaker 1: in a good place. And I would be frightened if
Speaker 1: I if I had my money there. And so I
Speaker 1: think that diversification point is is crucial. Finding a fund
Speaker 1: that's that's highly diversified, that gives you a wide exposure
Speaker 1: to the overall stock market is is important so that
Speaker 1: you're not putting all your eggs in one basket or
Speaker 1: just a few baskets. That's right. Yeah, So regardless of
Speaker 1: what the market is doing, pay attention to the choice
Speaker 1: of funds that you're putting your money in. UH And
Speaker 1: a part of that's a part of that fund choice
Speaker 1: is paying attention to the all important expense ratio as well.
Speaker 1: We we don't want you to pay more when you
Speaker 1: don't need to, because these fees will eat into your returns,
Speaker 1: especially the longer you plan to continue investing those dollars.
Speaker 1: You want to make sure that you are kneecapping yourself
Speaker 1: and experiencing poor returns due to a poor choice of funds.
Speaker 1: And so if you've been listening for any amount of time,
Speaker 1: you know that we love Vanguard, we love Fidelity and Schwab.
Speaker 1: Those are the discount brokerages who offer the diversified total
Speaker 1: market style funds that we love with microscopic to virtually
Speaker 1: non existent fees when we're talking hundreds of a percentage
Speaker 1: point when it comes to what they're charging you, that's
Speaker 1: what we want to see, either that or nothing at all. Yeah,
Speaker 1: but I see those higher fees as like insult to injury,
Speaker 1: especially when that fee laden fund is underperforming those broader markets,
Speaker 1: super cheap index funds that that you and I love.
Speaker 1: It's quite literally kicking you while you're down. Yes, yes
Speaker 1: it is. And so let's say you are invested in
Speaker 1: a way that aligns with your own specific risk. Laurance, Well,
Speaker 1: an important step to take when it comes to staying
Speaker 1: the course is to insulate yourself from the feeling of
Speaker 1: pain when the market is not doing so hot. Not
Speaker 1: by avoiding market participation, not by not investing, but might
Speaker 1: not looking at what's going on with your portfolio. That
Speaker 1: is a mistake I think people people make is that
Speaker 1: they're they pay too much attention. Because once you kind
Speaker 1: of have your strategy down, once you know your risk,
Speaker 1: Colorance and once you have started stocking money in every
Speaker 1: two weeks like clockwork on on the rag, well, who
Speaker 1: cares what's happening. You're gonna want to continue to ride
Speaker 1: it out through thick and through thin. And so what
Speaker 1: you might need to do is to one yet not
Speaker 1: look at your portfolio performance, especially especially in times of turbulence,
Speaker 1: and also avoid the headlines. So don't log into your
Speaker 1: account and kind of see that you're down six percent
Speaker 1: on the week or on the year. Right, those those
Speaker 1: inputs and and seeing them firsthand can trigger an emotional reaction,
Speaker 1: leading to potentially a knee jerk reaction on your part, selling,
Speaker 1: maybe at the wrong time, locking in losses. And yeah,
Speaker 1: this costs you money and it negatively impacts your financial future,
Speaker 1: especially if you're moving money that is in the market
Speaker 1: while it's down into cash. You're doing the exact opposite thing.
Speaker 1: We want to see you, uh, we want to see
Speaker 1: you actually funneling more of your cash from the sidelines
Speaker 1: into the market to take advantage of basically the sale
Speaker 1: that's happening in the market at the current moment. And so,
Speaker 1: but it's really important to kind of have a couple
Speaker 1: of mechanisms in place that prevents you from doing something
Speaker 1: that's emotionally charged, that could that could ultimately affect your
Speaker 1: future wealth by thousands or tens of thousands of dollars. Yeah,
Speaker 1: it's important to remember that these temporary market downturns, they're
Speaker 1: not costing you anything unless you sell. Once you sell,
Speaker 1: you cement those losses. Uh. And So in the game
Speaker 1: of investing, it's important to think and act for the
Speaker 1: long term. And you do that by reminding yourself why
Speaker 1: it is that you're investing in the first place. And
Speaker 1: and for most of us, it isn't to get filthy rich.
Speaker 1: That's not that's not our goal. It sounds nice, but
Speaker 1: it's not our goal, right. Not many of us need
Speaker 1: or want tens of millions of dollars in assets. Instead,
Speaker 1: we would rather get to a point of financial security
Speaker 1: and then hopefully to be able to chief financial independence
Speaker 1: in a reasonable amount of time. Uh. And So when
Speaker 1: you remember why it is that you're investing chasing these returns,
Speaker 1: it seems less important all of a sudden. It's why
Speaker 1: it's so important to keep your timeline in mind. Right,
Speaker 1: going back to like the running uh analogy, If you
Speaker 1: know it's it's difficult to know how fast you should
Speaker 1: be running if you don't know if you're running for
Speaker 1: a hundred meters or if you're running a tin k, right,
Speaker 1: and so that's going to have a massive impact on
Speaker 1: the pace at which you're expecting to run. And so
Speaker 1: the same thing is true when it comes to the
Speaker 1: rate at what you expect to see returns within your portfolio. Yeah,
Speaker 1: I like that, Matt. If you remember that you're investing
Speaker 1: for future retirement, that you're still thirty years away from
Speaker 1: the desire or the feeling you have like I need
Speaker 1: to double my money by investing in some sort of
Speaker 1: speculative asset within the next three to six months. Well
Speaker 1: that kind of goes away because you're like, that's not
Speaker 1: the game I'm playing, Like why am I? Why am
Speaker 1: I even trying for that? Really, all I want is
Speaker 1: financial independence twenty years down the road. And so you
Speaker 1: can kind of like chill Ox and let other people,
Speaker 1: you know, do their crazy gambling thing all that take
Speaker 1: part in all that speculation. You don't have to do
Speaker 1: it because you're not playing that game. And then ultimately,
Speaker 1: what we would say when it comes to the stock
Speaker 1: market is is there's no better alternative when you're looking
Speaker 1: to grow wealth over the long haul. Again, if you're
Speaker 1: in the wealth building phase of your life, the stock
Speaker 1: market is where you're gonna want to be stashing dough.
Speaker 1: Despite the volatility and the lackluster future predictions. You know,
Speaker 1: if you haven't noticed, even with recent upticks in what
Speaker 1: savings accounts are paying rates on money or stashing away
Speaker 1: with your bank, they still suck. And that doesn't mean
Speaker 1: that you shouldn't be saving. You should, Like we're still
Speaker 1: fans of people having liquid cash, like we talked about
Speaker 1: earlier in the episode. It just means that you need
Speaker 1: market exposure to grow your nest egg because if you're
Speaker 1: just saving, you're not going to see your returns compound
Speaker 1: in any meaningful way. And so yeah, while the next
Speaker 1: few months and potentially even the next few years might
Speaker 1: see smaller, insignificant returns, it's still smart to bet on
Speaker 1: American ingenuity and to invest your money in our collective future.
Speaker 1: I would say, in order to grow your wealth for
Speaker 1: for your future. Really, when you're looking at alternatives, there
Speaker 1: aren't many that rival the wealth building potential of the
Speaker 1: U stock market. That's right, man, That's what we're putting
Speaker 1: our money in the stock markets as well as into
Speaker 1: the coffers of wonderful craft breweries, including those of Flying Machine.
Speaker 1: This is Escape from Lagger Mountain. This is a dry
Speaker 1: hopped rice logger with a couple of hops here that
Speaker 1: they're calling out. And I noticed here too that this
Speaker 1: is a beer out of Wilmington's. There are a lot
Speaker 1: of great breweries in Wilmington in North Carolina in general,
Speaker 1: but I mean specifically Wilmington. They must have really good
Speaker 1: beer laws up there in the north in North Carolina,
Speaker 1: and it's a incentivize all of this great brewing. But
Speaker 1: what ye what your thoughts on this specific beer? Okay,
Speaker 1: I will say I haven't had many rice loggers. I
Speaker 1: haven't either, and I thought it was really tasty it
Speaker 1: Maybe I should have more rice loggers because this one
Speaker 1: was especially this summer year. It was nice and light,
Speaker 1: but it also had those refreshing hot vibes like you
Speaker 1: could tell the dry hops gave like nice hop a
Speaker 1: roma and good hot flavor without being overpowering. And so
Speaker 1: this was this was a great beer. I was a
Speaker 1: big fan. Yeah. So from what I understand when it
Speaker 1: comes to beers that are brewed with rice it's it
Speaker 1: works as like a clarifying agent, and so it literally
Speaker 1: makes it taste cleaner, like cleaner and fresher, which is
Speaker 1: great when you're enjoying a nice cold logger like this,
Speaker 1: but it also literally makes it clearer when you're looking
Speaker 1: at it, and so it tends to pour a bit
Speaker 1: clearer as a you know, compared to like a hazy
Speaker 1: pale ale or something like that. But uh, the Flying
Speaker 1: Machine and the fact that they have the skull in here,
Speaker 1: this reminds me a lot of Is it parish that
Speaker 1: has the like the ghost in the machine? I don't know.
Speaker 1: There's a lot across the New Orleans Brewery right, there's
Speaker 1: also a great brewery. But we definitely enjoyed this one
Speaker 1: again from Flying Machine out of Wilmington, North Carolina. And
Speaker 1: so if you're able to pick one of these up
Speaker 1: wherever it is that you live, highly recommended, especially as
Speaker 1: an alternative to those macro loggers out there that you
Speaker 1: can buy. Yeah, this is one of those well crafted
Speaker 1: loggers there, the macro ones. It's amazing how big of
Speaker 1: a difference there are between a lot of the new
Speaker 1: craft loggers that are being made. This one has a
Speaker 1: ton of different flavor profile action going on. It's delicious
Speaker 1: and it's clean, like you said, and versus like the
Speaker 1: muddled just kind of like not not so great flavors.
Speaker 1: Stinky logger yea, yeah, of the stinky ones that like
Speaker 1: you smell like your uncle, you know, so you know,
Speaker 1: you know whatich uncle we're talking about. Everyone's got one.
Speaker 1: And plus the label on this beer is as really
Speaker 1: beautiful as well. You can find a picture of it
Speaker 1: up on our website at how the Money dot com,
Speaker 1: along with any resources that we may have mentioned during
Speaker 1: this episode. Right, and so if you if you haven't
Speaker 1: signed up for the how the Money newsletter, by the way,
Speaker 1: you totally should go at how the Money dot com
Speaker 1: slash newsletter. We are sending it out for free once
Speaker 1: a week into your inbox every single Tuesday morning. You'll
Speaker 1: get some of the best financial nuggets that we have
Speaker 1: to offer in your inbox. But Matt, that's going to
Speaker 1: do it for this episode. Until next time. Best Friends Out,
Speaker 1: Best Friends Out.